I have the Thinkpad S1 Yoga with Windows 8.1 64-bit and have constantly been installing all updates. Currently my Fn key is not working. It doesn't matter whether I set the Fn and function keys to default as the F1-F12 buttons or the special functions, I cannot use the Fn key to toggle to the other option. I also can't use the Fn key in combination with the space bar to turn on the backlit keyboard. When I press the Esc + Fn button, nothing happens so the FnLk also doesn't work.

My laptop is out of warranty too. Is there a known update that causes this problem?

I installed the Hotkeys Features Integration for Windows 8.1 but it didn't help resolve the problem.

Welcome to the forums. Can you please specify the full model number of you Thinkpad?

Before saying it is somekind of hardware problem. Can you check if by any chance do you have the Fn - Ctrl switch enabled? Maybe to togled the Fn and Ctrl buttons, there are some Thinkpad models that allows you to do that. .. just in case check if Ctrl+Spacebar turns on your keyboard.

You can check on the computer BIOS if you have that function to toogle Fn - Ctrl keys. Also check on the BIOS (not in Windows) if you can turn the keyboard backlike with Fn+Space or Ctrl+Space.

2.- I noticed on my machine (it is a different model from yours) that when I access the BIOS, before Windows boot, the keyboard backlight can light up with Fn+Space. If you shut down your machine and access the BIOS when you turn it on you can give it a try. If it lights up it may be a problem with a Windows Driver.

3.- Just in case, can you check on Control Panel - Keyboard., if you have the Fn tab there.